Merchants today typically utilize some form of online advertising to augment at least part of their business transactions. This can range from advertising on websites to hosting their own websites, complete with shopping mechanisms and transaction processing systems. Although having a web site totally dedicated to a single merchant is great for providing in-depth product information and services, customers must still find the website before they can decide to make a purchase. To draw customers to their sites, merchants often advertise online in locations they feel will bring the most interested customers to their sites. Key advertisement locations and/or positions tend to be located near the top portion of a website and/or web page, which often catch the attention of web-surfers, users, clients, customers, etc. In general, most websites and/or web pages implement some form of advertisement in order to maximize the potential profit from such web space. Furthermore, advertisements are most valuable in places commonly visited by users, for example, some form of a search engine site. Thus, advertising on search engine pages has become quite popular with merchants.
Historically, large web search engines have sold advertising space based on keyword-driven search results. For example, a first website can employ an advertising space selling technique that conducts auctions for certain keywords, and the highest bidder(s) can have their ads placed on pages containing search results from the first website, or they obtain preferred placement among the search results (e.g., at the top of the results list). By providing advertisements based on a specific keyword search, an advertiser is able to target a particular audience of specific portions and/or size which optimizes the advertisement campaign.
As web advertising develops, a number of companies are now acquiring large publisher bases from which they can sell advertisements. In particular, a search engine company can sign up publishers into an ad network, wherein advertisers can pay the search engine company to serve advertisements to participants of the ad network. The search engine company can then pay a portion or all of the advertising revenue to the individual publishers. For example, a publisher in the ad network may have an article on its website that talks about digital cameras, and the ad network would display digital camera advertisements from advertisers in the ad network on that particular website. The search engine company would auction off the “digital camera” keyword to advertisers in its ad network and display ads from the highest bidder(s) or ads that are most likely to generate highest expectation of revenue.
By way of further background, there are two conventional classes of online ads sales mechanisms. A first technique of sale of ads is where an ad network uses dynamic auction to distribute ads on publishers' sites. This model most often is based on the advertisers' willingness to pay on a per click of their ad basis from selected keywords, site matching, and/or category matching attributes offered by the ad network. A second, alternative technique of sales ads is where an ad network guarantees advertisers a certain amount of displays of ads on publishers sites upfront at a set rate that the advertiser buys or not. Such traditional techniques are cumbersome, inefficient, and overall inaccurate for establishing the worth related to online ad space and they are hard to compare.
There are a number of problems with this proprietary ad network model. First, companies that are building ad networks have an inherent conflict of interest because they represent both the publisher and the advertiser. Second, because there are multiple companies that are creating ad networks, advertisers have the burden of managing buys across many ad networks, which results in significant cost and complexity to the advertiser. Third, because publishers are for all practical purposes locked into a single ad network, the advertiser competition is limited, which results in lower return for the publishers. Fourth, the lack of general standards around terms and conditions, and behavioral segmentation is a major obstacle to reaching the full market value of online display advertising. There is also no current standardization across publishers for accepted media types and ad formats. Fifth, smaller publishers currently have very little power individually, even if they serve a hard-to-reach audience. Finally, ISPs and other owners of large user databases are not realizing the full value of the information they have due to privacy concerns and lack of a proper marketplace.